So, What is an Option Fee?
Most common in real estate markets in Texas, the Option Fee is a fee paid by the buyer to the seller for the option to terminate the real estate contract for any reason during the Option Period. This fee provides consideration to the seller for taking the property off the market during the Option Period.
- The Option Fee amount is negotiable ( can range anywhere from $10/day to $100/day or more).
- The Option Fee is non-refundable.
- The Option Fee is given (hand-delivered or mailed) to the seller (or seller’s agent) at the beginning of the contract period.
- The Option Fee must be delivered no later than 11:59 p.m. on the third day after the effective date of the contract. For example, if the contract effective date is March 1, the option fee must be paid by 11:59 p.m. March 4.
- The Option Fee may or may not be credited to the buyer’s costs at closing. This negotiable and is determined in the real estate contract.
- If the buyer chooses to terminate the contract during the option period, the seller has the right to keep the amount paid for the option period.
- The Option Fee may be extended for an agreed-upon number of days with an additional fee given to the seller. There must be additional monies given to the seller to ensure that the extension is legally enforceable.
Have additional questions about the Option Fee here in Texas? Call, text, or email me today! 832-517-0988 or firstname.lastname@example.org